Undoubtedly, the biggest issue before the House tomorrow would be the sale of Government?s 37.5% shareholding in BTL, which could earn GOB roughly US$35 million in foreign currency. Under the new Finance and Audit Act, 2005, Government must seek legislative approval before its sells any assets that value BZ$2 million or more.
The BTL shares are valued at nearly BZ$70 million, while Government has said that it plans to sell roughly BZ$150 million of DFC?s assets. Our reports are that Englishman Michael Ashcroft would be a major purchaser for both BTL and DFC.
The BTL workers have so far been unable to source financing to purchase the 37.5% block of shares, which Government has pledged to them. They said that bankers had told them that they need a 100% government guarantee, which GOB is not able to give, given its current credit standing.
Our newspaper understands that tomorrow the Government will make the same proposal to the House which Lord Ashcroft gave to the unions some weeks ago – financing to purchase some of BTL?s shares in the condition that the shares would be allotted as follows: 12.5% of BTL?s shares to Ashcroft, 20% to the BTL workers and 5% to the broader Belizean population.
Paul Perriott, president of BTL?s Belize Communication Workers Union, said that up until tonight, a Government official had given them the assurance that GOB would propose something so that workers would end up with some of the shares. He said that the official did not say what percentage would be offered to the workers, and what portion would be offered to Ashcroft.
Unconfirmed reports are that the sale would be at US$2.62 per share, a substantial loss for GOB compared to the price that GOB had paid Ashcroft for the shares in 2004, that is, when GOB thought it was buying the shares from Ashcroft only to sell to Jeffrey Prosser.
With the sale of 15% of BTL to Ashcroft in March, Government had promised to make Ashcroft a ?permitted person,? allowing him to own more than 25% of BTL?s shares. The BTL workers have, however, gone to the Supreme Court to block the sale to Ashcroft of more than 25% of BTL. Prosser currently holds roughly 31% of BTL?s shares, according to company reports.
In addition, Prime Minister, Hon. Said Musa is expected to lay two main tax measures before the House of Representatives on Friday, June 17, measures intended to garner more dollars for Central Government to finance its 2005/2006 budget.
Our reports are that in a meeting of the Tax Reform Committee, convened at 3:00 p.m. today at the Central Bank?s conference room, the Prime Minister, accompanied by Minister of State in the Ministry of Finance, Hon. Joe Coye, and Financial Secretary, Dr. Carla Barnett, announced that GOB had to reduce its deficit by $70 million. Fifteen percent (about $10 million) would come from increases in taxes, such as excise tax hikes on beer, alcohol and tobacco; 60% would come from expenditure cuts and 25% from strengthening tax collections.
Amandala is reliably informed that the Government intends to increase the excise tax on beer from $4.00 per gallon to $6.00 per gallon?an increase of 50%. This was the IMF?s original recommendation when it visited the country to work with Belize on its prior ?homegrown? economic program last November. Government had increased the tax in February from $1.80 to $3.60 per gallon, and then in April from $3.60 to $4.00 per gallon.
While there have been reports that stamp duty on land transfers would also be increased from 10% to 12% for foreigners and from 5% to 7% for Belizeans, we understand that the order papers for tomorrow?s Sitting do not include such an increase. The papers do, however, say that Government would charge stamp duties on trusts and other such institutions ?ad valorem,? or at value. The intention is reportedly to tighten up on the collection of stamp duties for land transfers, on which Government feels it has been slipping in revenue collection.
The increase in excise tax by 50% on beer is one of several recommendations that the IMF made after concluding its annual Article IV Consultation in Belize in February. The IMF had additionally called for the same 50% increase in excise tax on other alcoholic beverages, tobacco and soft drinks.
The IMF also recommended that GOB should implement the recommendations of the Inter-American Development Bank (IDB) on Belize. The IDB?s recommendations lean towards the massive liquidation of the DFC, which has become a burden on the public purse because it is GOB which is currently meeting its debt payments.
We understand that Government plans to introduce a bill that would suspend pension payments for Government retirees who are reemployed in the public sector.
The House is also expected to review the Belize Constitutional 5thAmendment Bill, which would extend the categories of offices that require Senate approval, and seek to recognize the magistracy as an integral part of the judicial system of Belize and secure the tenure of qualified magistrates. It would further seek to expand the categories of holders of offices whose remuneration is a charge on the Consolidated Revenue Fund, and provide for annual budgets that would give them a greater degree of independence and allow them priority calls on the Consolidated Revenue Fund. Such offices, we are told, could include the Office of the Ombudsman, the Contractor General, the Integrity Commission, and the Elections and Boundaries Commission, among others.